President Trump’s tax proposal is out and new savings are coming for seniors in 2025. Under the act, known as “The One, Big, Beautiful Bill”, qualifying seniors can deduct an additional $4,000 on their 2025 tax return.
The “senior bonus” is a tax deduction available to taxpayers aged 65 and older with incomes below $75,000 for single filers and $150,000 for joint filers. It will be available from 2025 through 2028 and can be claimed whether you take the standard deduction or itemize.
The provision allows a $4,000 additional deduction per eligible filer, so joint filers can get an $8,000 deduction if both filers meet the criteria.
Republican Rep. Nicole Malliotakis, who authored the provision, said the additional deduction will provide, “Needed tax relief because too many seniors are being forced to stretch their retirement savings further than ever before.”
While social security beneficiaries will still see taxes taken out of their checks, the measure will reduce the overall tax burden for social security recipients. Today, more than half of all retirees pay taxes on social security benefits, up from less than 10% in the 1980s.
Critics argue the changes will harm the long-term health of the program, which is projected to become insolvent by 2034. Supporters say the changes are needed to address the growing financial challenges retirees face, as cost of living increases have outpaced adjustments to social security.
The debate over taxes on social security benefits is expected to continue, with two senators proposing separate legislation that would raise the income threshold for social security benefits to be taxed.
Under current law, individuals are taxed on benefits if their base income is greater than $28,000, and couples are taxed at combined incomes of $34,000. The Retirees First Act would raise those thresholds to $34,000 and $68,000 respectively, representing the largest change in social security benefit taxes in years.
